ISP Group Slams Teltra's DSL Pricing

[Sydney, AUSTRALIA] Australian ISP peering co-operative AusBONE has described Telstra's wholesale DSL pricing scheme as "a joke". Paul Montgomery, CEO of AusBONE, said that "according to information from the ISP community," Telstra's network access prices amount to more than $10,000 per month for a single 2Mbps channel for each exchange, in addition to a charge of $140 per user.

"Telstra has been advising potential DSL resellers to connect around 300 DSL users over this channel, meaning that each user would have to pay at least $350 per month plus data charges for a connection that, assuming full usage, might reach no higher than 10Kbps," he claimed. "Even if usage was only a third of capacity, it would still limit customer access speeds to less than a 33.6Kbps modem. Telstra's pricing regime is clearly intended to price its competitors out of the market."

One of the only Telstra wholesale customers to announce its planned pricing for ADSL, Pacific Internet, will offer two levels of speed, either 64Kbps uplink with 256Kbps downlink, or 256Kbps uplink with 1.5Mbps downlink. The planned monthly rates are $110 per month and $350 per month respectively, with equipment and installation included, and a per megabyte cost of 12.9 cents.

"Telstra cannot expect any party in this industry, particularly the regulators, to take [its] pricing seriously," said Mr Montgomery. "Telstra's claims on its costs are obviously based on inefficient practices and profiteering brought on by its monopoly on ULL access," he added.

The industry has previously expressed outrage at Telstra's unbundled local loop pricing, saying it discourages competition in the wholesale market. While Telstra maintained that the prices were "fair and justifiable because they equal the true costs of providing and maintaining the service," competitors such as Cable & Wireless Optus weren't convinced. "You could say we're fairly unhappy," said a CWO representative, who had expected the prices to be less than a third of those demanded by Telstra.

Greg Pennefather of Request DSL said Telstra's DSL pricing would drive the demand for spectral unbundling of the local loop, or line sharing. Line sharing allows the incumbent carrier to continue to provide voice services over its copper lines, while DSL providers use the remaining spectrum for data provision. Some ISPs in the U.S. have been provided with line sharing access free of charge.